We’re going loko!  Chris Hunter, founder of several successful beverage brands, including the iconic Four Loko as well as the health-focused Koia, and the unique Not Your Father's Root Beer, shares insights from his memoir, “Blackout Punch: an Entrepreneur’s Journey from Chaos to Clarity”, including the gap in the market that he identified that led to the creation of Four Loko, what they SHOULD have done at the very beginning to avoid disaster later, how the role of Founder/CEO is ill-defined (and why that's a good thing), hunters vs. gatherers in sales, fighting the government to keep Four Loko legal, creating Not Your Father’s Root Beer, what success means as a younger man versus now, and the value of knowing you’re going to be wrong but taking the first step anyways.

Mentioned in this episode:

Learn more at SouthwesternConsulting.com/Coaching/Students

Southwestern Student Coaching

Today's guest is Chris Hunter, the founder of

several successful beverage brands, including Four Loko and

Not Your Father's Root Beer. His new memoir, Blackout Punch: An

Entrepreneurs Journey From Chaos to Clarity, tells the story. How

are you? Good to meet ya.

Good to meet you as well.

You're hailing from Miami right now. But where

did where did you grow up?

Yeah, good suspicion than I didn't

originally grew up in Miami. I grew up in Youngstown, Ohio.

Historically, if you look back generations of my family, it's

probably that there were a lot of Italian and Irish immigrants

that were working in the steel mills. You know, Youngstown was

once a booming metropolis for at a time top 10 city. Once the

steel mills closed, and the and the auto manufacturers started

shuttering this the city just got decimated. So I remember

growing up and my great grandmother had these pictures

of like Youngstown as this hotspot, right downtown was

thriving, people were all over. And I'm like, Where is this

place? Because I didn't know any of that.

Yeah, you know, I can't imagine we're going to

talk about like your whole, successful commercial

enterprises. But I'm always kind of curious. Usually, you know, a

high schooler, or even a young recent graduate isn't

necessarily thinking like, Man, I'm going to start all these

amazing beverage companies. I gotta, I got to know what were

you on the track to do? Or what were you thinking you were going

to do?

I don't know that I had a big, aspirational kind

of career path. Except for that I was like, I want to be rich.

And growing up in a lower middle class family, like you recognize

the restraints that money can put on a on a family. And I was

fortunate that I got into a couple classes that were they

call them advanced classes, they were really just opportunities

to think outside the box, I got to do an internship when I was

in like fifth grade, like all these unique things. And I feel

like it opened my eyes to like, what I want to do isn't here, or

at least isn't present in my life. I don't know what it is

just gonna be something different. That coupled with the

fact that I always had this entrepreneurial spirit. It's

kind of like I could figure this out, I'll find unique ways to

make money that excite me, propelled me into what I ended

up doing. I could not have mapped out my career path,

though. What was the first business venture for you? Yeah,

I mean, you can go way, way back and say the first business

venture was, you know, being a first grader coloring pictures

out of a coloring book and selling them door to door. I did

that right. But but really more and there's many of those

examples along the way. But maybe more officially was in

college, there were three businesses that I started. One

was never really structured as a business, but it was actually

the largest. And it was cold fusion projects, which ended up

being my, the parent company of for logo. And it was a it was a

promotions business. So I would do nightlife promotions, mainly

in Columbus, but in other cities across the country. It paid

really well. It was a heck of a job for a college student, you

know, bring people together, especially out of the bar and

nightclub. And I met a lot of people. The other business I

started, which was actually with one of my fusion projects,

partners was called Wild havens. And the idea was that we were

going to give people access to unique and exclusive events in

different cities or locations around the world. And we put a

little effort into them, probably lasted about a year,

and then we shut that down. And then the third was, was a

magazine. We started in Columbus with some different partners. It

was centered around four main aspects of the city. It was

entertainment, it was personality, I forget the other

two, but you get the idea. It was a free publication. That's

really where I started, like learning a little more about

business. And then then I moved to Chicago was just trying to

figure out how to pay my bills and ultimately took a job and

then started fusion projects.

What did you learn in the events business about

what you liked and didn't like?

I loved working with people, right? I loved

interacting with people. I'm a social guy by nature. I felt

like it was really eye opening the impact of relationships,

right how much they matter and how many doors they can open.

One of the things I didn't like was for the future. You know, it

was obviously young and single at that time. But that's a very

grueling career path nights and weekends. And, and so I wasn't

sure that that was the right right path for me. At the time,

I probably wouldn't have said that. But looking back, that was

a good pivot.

The best thing ever!

It was amazing. Yeah, so go to Chicago and I

refuse to get a nine to five type gig I ignorantly felt like

my experience was more than that, right, I wasn't going to

take some entry level corporate job. And that was fine. In

theory until a couple months in, I had credit card debt racked up

and is like I got to figure out a way to pay bills. And you

know, what really tipped tip, the scale was there was one day

where I could not pay rent, and my now wife, girlfriend at the

time, cut me a check to cover rent. And I was like, Man, I

really got to do something. Now, while though I had met these

guys who were doing this hail damage gig, basically, like

storm chasing, they'd go to neighborhoods that were

impacted, and they would, you know, facilitate the roof

repairs that are all making a ton of money. It's like, I'm

going to take this job. And you know, you didn't need any

qualifications. The funny thing, the ironic thing of that is I'm

afraid of heights. So I'm climbing on roofs. But you know,

necessity or desperation, whatever you want to call it

will make you do some interesting things. And that was

one of them. And I never lost the contest. I'd never lost the

contract because I needed the money. But I didn't want to do

that for long. Yeah, from my promotions career, I had

collected a lot of contacts and business cards. One of them was

a guy that was involved in a startup vodka company. And long

story short, I bugged him literally email and call every

day. And so he gave me a job. And that's what got me into

beverages.

Wow. So you had this persistence.

To give you and idea how aggressive or desperate

interchange whatever word you want, I was at that time, there

was this startup, there was this other startup vodka company that

was very popular in Chicago was called effing vodka, they ended

up becoming a pretty big brand. And I liked that brand. And I

wanted to work for them. And I did the same thing with them. So

much. So that I said, If I don't hear back from you, I will

assume an interview on Tuesday at 10 o'clock. And I showed up

at there, I never heard back from him. And I showed up their

office. And no one was there, I left my resume on the desk and

walked out. But like, that's how aggressive I was because I gotta

eat, man, I gotta pay the bills.

That's amazing. It's who was that then the

person that you ended up with in terms of working on this on for

a logo or no?

So I started selling vodka for this company.

And they put me in quite possibly the most difficult

situation that you can have, which is on premise, which is

bars and nightclubs and restaurants in Chicago. And the

reason it's the most difficult situations, because every brand

is spending their money there that have big budgets, right.

And so I was going in these places with no budgets and no

experience, just ask him, you know, to believe my story or to

believe in me and put the product in their in their

stores. I did that for a couple months. Then he started

expanding my responsibilities. So I managed off premise, which

is stores, grocery stores, liquor stores, whatever may be

in Illinois, and then they expanded me to five states. At

that point, I realized that I understood at least enough the

distribution game, you know, in alcohol, it's a three tier

system. So you have the supplier, which is the creator

of the product, you have the distributor, which takes the

product to the bars of the store, and then you have this

retail location. And so I understood that I met enough

people, and I was selling a lot of the vodka that was being

mixed in with Red Bull. I was 25. I was out also drinking a

lot of vodka mixed in Red Bull. And so I said, you know, maybe

we should try to do this as a combination ready to drink

product. And so I called my old college buddy. He's the guy that

I had tried to start wild havens with. And I said, Hey, I'm

thinking to start in this thing. And he's like, yeah, man, he was

part time in it a couple months in we realized neither of us

really wanted to do the financial modeling and DAX and I

had a buddy who worked for ABN AMRO, I called him and I said,

Hey, what do you think? Yeah, man, and that's how we got

started. Our investors were friends and family. You know,

where I started being that I'm from Youngstown, blue collar,

lower middle class there, there was no money from friends and

family for me. Fortunately, my partner's both went to their

families, and they put in small amounts of money in retrospect

for the size the company became, but that was our investment. We

didn't have the experience or the connections to really go

raise traditional funding, and so we bootstrapped it and and

that looking back luckily, we did because I think that had we

had more money in the early days, we would have just spent

more money on all the wrong things.

What were some of the walls and challenges that

you didn't expect in and growing this thing?

Well, everyone had told me at the beginning, like,

make sure you understand the exit. How do you guys separate

in the future? And being naive 25 year olds, I think we just

blew past that, hey, we're friends, who cares, it'll all

work out. And quite frankly, like, I assumed I was kind of

the connection point, right, I brought the two guys together, I

assumed I would always kind of be in the majority with one of

them. And it wasn't really a big deal. And so we just set up

Legal Zoom documents that were very, like, basic. And it was

kind of like majority rules. And in retrospect, you know, I

learned that we should spend more time thinking that through

we were not thinking big picture long term, things change, people

change, lives change. I mean, mine Sure did, right. I was 25.

At that time, in my 30s, I got married, I have three kids now,

like life was very different. And that ended up coming back to

bite me. So it was kinda like, let's just divide and conquer,

right? Let's not, I have a different mentality than you.

And instead of aligning or hashing through that, what do

you do what you want your world and I'll do what I want my

world. And we brought in the business coach when the company

got bigger, and he identified that that was a significant

threat to the business quickly, he said, You guys have a three

headed monster with no real hierarchy. And if you can't

figure this out, you're gonna sink the business, and it was

too big for for us to sink at that time.

We're talking you grow into 10 million, 50 million

100 million in revenue, different challenges at

different points, right? Can you can you give a few examples of

like, what was challenging about getting to 10 million versus

what it was like going to 100?

Yeah, it's all challenging, like you said, but

it's just in different ways. And I think for me, that early stage

of 1 million to 10 million is is challenging, but it's a lot of

fun, because you're celebrating a lot of wins, often. Right?

And, and you're trying new things, and you're able to be

scrappy, and, and, and atypical in your approach and things. But

it's difficult, right? Because it really matters. I mean, we

were at Fusion, we were almost out of business for the first

two years, consistently, right? month over month, there were

times where we didn't take salaries. And so those are

different challenges than when we went into hyper growth when

we grew from eight to 100, and 150. Plus, in two years, like,

those are different challenges. Those challenges are like, how

do you keep your materials coming in? How do you keep

inventory? How do you scale fast enough to support this kind of

growth, right, and then, and then accoya, I would say, it was

a little, it's a, it's been a little bit different as we went

through that phase of going from 10 to 50. Plus, you're really

putting in more infrastructure, and more systems. And to be

quite honest, that's not what I love to do. And so it was really

important for me to have a team that did love to do that. And I

still gets funny, I still get frustrated with some of the

systems that are in place. Like, who cares? Just, you know,

whatever. And they're like, No, this is the process. Can you

please follow us so they have to hold me accountable?

Do you feel like your gift is like you're the

resident Rainmaker, like bringing in connections and

relationships?

Yeah, I think every founder and CEO are gonna

have a different skill set. And that's something I didn't

realize, as a kid, I thought, like the the role of founder or

CEO was very well defined. It's not right. And so understanding

where I add the most value has been really important to me. And

it's definitely that it's, I am a salesperson, I enjoy marketing

and finding unique ways to build awareness. And then I enjoy

working on strategic partnerships and high level

relationships. And so, like, where that comes into play, and

is the most effective for the company, would be the example

would be Koya. With Starbucks, you know, I knew that Koya was a

fit for Starbucks, I knew it's somewhere that we wanted that

product to be distributed since day one. So eight years ago, I

started working on how do we get into Starbucks. And we had

plenty of starts and stops along the way, I never gave that up.

As to one of our sales team, I said, this is my account that

I'm going to figure out. And it was definitely not a linear

path. But I was able to strike a strategic partnership with

Starbucks, and koi is now distributed in Starbucks

nationwide. Those are the kinds of things that one excite me and

two, I feel like I can do and maybe you can't hire others to

do on the team. I love that. Look, there are in sales, there

are hunters and there are gatherers, the way we think

about it right in the hunter, I not only my last name, but I am

the hunter, right I like enjoy going and creating the new

relationships and striking the new deals. And that's a lot of

fun for a lot of people. There are other people who are

gatherers and they enjoy optimizing those relationships

and building on them. And there's a lot of things that a

lot of us can do. But it doesn't mean we shouldn't do right and

so I can do that but it's not the highest and best use of of

my time or skills.

Selling isn't just an external thing right? Finding

partnerships and selling and bringing in business is super

important. But sales is a skill in general about communication.

And you end up in leadership, finding yourself selling the

vision to your people or selling lots of things internally right

to get it done. And I'm kind of curious. I mean, one thing that

popped out to me was the government regulations and a

little battle that you got to kind of jump back into what you

faced when you were, you know, faced with some sort of the

government agencies trying to keep for local, legal, right.

How did your communication skills? How was that relevant in

that in that issue?

Yeah, it's a complex question. And situation

that was very intense, as you can imagine, but trying to

summarize it up in a nutshell, it was really important for us

to get aligned on how we were going to address these

situations. They were very serious, right to the point

where we were being sued by the FDA, that B, which governs

alcohol 18 Attorney General's, there were frivolous lawsuits,

class action lawsuits coming out of the woodwork, there was a

point where I was told by our legal representative

representation, don't answer the door, because you may get served

papers or arrested, right, it was that intense. And so for us

looking back at it, or at least for me, looking back at it, I

was baffled because we played by the rules, our our beverage was

approved by the TTB. It was approved by every state that it

went into that included the formulas, the cans, everything

that we're being criticized for, was legally approved. And so

they had they it broad sensitives had applied pressure

to other brewers that were doing similar things, and they were

much larger than us. And so for them, it was like this isn't

worth, you know, the juice isn't worth the squeeze. And so they

just voluntarily reformulated and changed the products that

were selling. For us, it was the only thing we were selling. And

so our take was, hey, we will play by whatever rules you put

out there. But you have to make them consistent and fair.

Because if we voluntarily change, all that does is leave

the door open for the next person to come along and do it

until they get big, right. So in terms of communication, it

really tested us with my theory is like high highs and low lows

will bond you right? They're extreme, and they're intense.

And it's easy to get along during those times. But it

doesn't mean it's easy to communicate during those times.

We were running a breakneck pace. We were trying to approach

everything in a line fashion, but it didn't always happen. And

so our communication could have been better. Or we got through

it.

Literally some life changing moments during

that time for you.

Absolutely. Yeah.

I guess one of the more recent ventures was not

your father's root beer.

Yeah. So I start to look at, I started to look at

what assets we had as a company, right. And it's very easy to

understand that you have the brand with the revenue and the

distribution, that's clearly an asset that most people look at.

And understand. We added another asset, which was we had roughly

325 distributors across the country and some in other

countries that touched every retail location in their

territory. So we had a distribution network. I'm not

saying we owned it, but we had access, right. And so as I was

thinking about, we had this big company, relatively big company

and big brand, or relatively big brand that was almost taken away

from us at the whim of a change of government regulations. How

do we diversify? So innovation and diversifying was really

important? And then the second is how do we use our assets? And

so for me, at that time, craft beer was a hottest thing in the

world, right? Everyone was launching craft beers. But there

were there were a lot of the same. There were unique stories.

Oh, this one's from Chicago. This one's from San Diego, but

the product itself was not really that different. And so we

were really lucky that we were introduced to one of our

relationships to a guy named Tim Kovac, who was this like kind of

mad scientist Brewer and he had come up with this alcoholic Root

Beer it had no name it had no real and and he was in the

Chicagoland area. And when I tried this stuff I it was this

like the light bulb went off. It was this immediate realization

of this is unique needs in the craft beer space, which is

popular, this is unique. No one else is doing this right now.

And it's in our wheelhouse, because what we really did with

for locals around flavoring, right. And so for me, that was

exciting. It was something new, as I mentioned earlier, like

creating something new. And so this was really exciting. So

there was also some internal turmoil developing as I

mentioned about partnerships and lack of clarity of roles. And so

I said, I'm gonna dive into this, and I dove into that, and

when we brought that thing to life, it was one of the most

exciting things I've ever seen. We took it from non existent to

uniquely branded and to being the fastest growing craft beer

in the country in a matter of 18 months and then we ended up

selling had to pass. The other thing that was exciting to me

about that. As I mentioned, I like to work on things. I'm

aligned with it. Whatever phase of life I'm in. That was 25.

When we started Four Loko, caffeine and alcohol didn't seem

crazy, it was part of, you know, our weekends. At this point I

was I was early 30s. And craft beer was much more by speed. So

you know, that was kind of an exciting evolution and then

again, realizing where I was in life and circumstances got me

into a place where better for you and healthy products were

really important to me.

That's so interesting. It's It's like your

beverages reflect your your state in life like now you see I

energy like go get it in the beginning. And there's more like

this calm, healthy. Yes, yeah. I love the bound and gravitated

towards things that reflected that for you, right, that you

pursue products that you were passionate about for you. Just

quick lightning round. One thing that I always wanted to know

from guests is what's one piece of advice you're really glad you

didn't listen to.

So it's, it's something I'm actually working

through right now. Koia is a refrigerated plant based protein

drink, it's a ready to drink product. So bought off the

shelf, you open it, you can drink it right away. It's

delicious. It's it's low sugar, it's all the things that you

wouldn't expect when you hear plant based protein drink,

right. And the refrigerated space is very niche. In a sense,

it takes additional capabilities to have refrigeration from

production all the way to the shelf. It's a very competitive

and difficult category. And so we've heard from multiple people

throughout the years, like, Okay, you guys are a

refrigerated beverage. That's where you need to stay. And over

the years, as we've talked to our consumers and listen to them

and understood innovations that worked and didn't, we realized

that what qualia really stands for is delicious plant protein

or delicious pork protein in general, we are now launching

Koya. in different formats and channels, we have a shelf stable

tetrapack version that will be available on Amazon, we're

launching a kid's line will launch a powder. And so the

advice that I'm happy we didn't follow in the long run was

staying in our lane.

So you listen to someone but the advice that

you're taking is from your customers and their

accessibility, not necessarily from some consultant. Love that.

One of the things that I think is a lot of our listeners wonder

is when you're dealing with a large organization, large team

and you're responsible for leading it time is one of the

most scarce resources that you have. Yeah, what's one habit or

practice that you feel saves you the most time each day?

Well, I try and I'm not always successful at

this, I try to block my emails. And what I mean by blocking them

is I try to dig in emails and run through them all and then

try to go do something else. And I'm not always successful at it.

But when I do that, I feel like I have the most satisfaction and

productivity and the least anxiety, what can suck me in or

anyone is just sitting in front of your computer and hitting

refresh on the email box. Like if I find myself doing that, I

usually need to just pick up the phone and call that person

rather than going back and forth. So that's that's one

thing. I think one of the things I've learned over time is is

prioritization is really important. And for me, this is

the season of life that my family is absolutely the number

one priority. I'm married, I have three kids, 11, nine, and

six. And when I sat back and thought about it, I realized

that I will always be able to create brands, I will always be

able to grow them. And while I'm not neglecting them, I also

realized that my children will only be this age once. So when I

have something that can do for the long run, and I have another

thing that is only once, I'm going to make sure that I

prioritize and focus on that only once thing.

I love that too. Yeah, you brought at the very

beginning of this podcast. He said, as a young man, success

meant to you making as much money as possible. That's

paraphrase. But you said money was number one, define what

success means to you now and how you know when you've achieved

it.

So that's a great question that I think has

multiple aspects to it. I think first of all, the most important

thing for me was learning and understanding who I am. And when

I when we brought in this consultant back at Fusion

projects, he did these personality assessments and

behavioral assessments, the one we did was called disc, and

there's many of them. And he came back to me at that point

and he said, Listen, if you have this perception of getting rich

and retiring on a boat, get rid of it right now because you will

be drunk, you will be addicted you will be divorced and you

will be miserable. That's just my personality. Right? And so

that was really impactful to me because it helped me realize

like where I grew up success look like oh, you get to retire

on a beach, drink a margarita and you don't have any worries.

That would actually be detrimental to me. And so

success means that I can stay in the mix work on things I want to

work on not need to work on anything. But But enjoy what I'm

doing every day staying active. And I think that not only will

keep me healthy, it'll keep me alive.

And so you've come to really enjoy the game itself.

Trust me, there are days that I'm like, Oh man,

I'm in too deep again, you know, it happens. You get blinders on

running a business, you forget about everything else in the

world. And sometimes that's necessary. But in the big

picture, yes. What What I enjoy now is growth. And growth is not

comfortable. You know, I went to Iceland and trained on breath

work and cold water exposure. Those are all just got done

marathons. And Ironman is those are all growth opportunities for

me. I want to I learn from my kids every day. That's growth.

And I'm learning in business every day. And that's growth and

growth is really important. And also keeps me motivated.

Two last quick questions; one morning routine,

but what does it look like in the morning if you have your

ideal routine?

I'll tell you when it's been in this best. And when

it's been at its worst. So my wife got really into Joe

Dispenza meditations. And so we woke up every day at 6am. We

meditated for about a half hour and then we got our day started.

And we were done meditating, and off like the day before the kids

ever woke up. At night, we would take time after we put the kids

to bed, that was our time to catch up on the day and talk

those are two really important things. That's when it looks at

its best. Of course, you add in eating healthy and exercise and

all that all that stuff, I think which is kind of table stakes.

At its worst, which I go through times now is one of them. You

know, I'm waking up just before the kids, I'm getting five

minutes in with my wife, I'm down to the coffee to get myself

going and kind of frantic all day. It's never perfect for me.

And but the beauty I guess is I can realize when it's not

perfect and adjust rather than just think that's how it is

forever.

I'm gonna rephrase this question I typically ask

her yes for you. Typically, I might ask you, you know, what

advice would you give a 21 year old version of yourself, but I'm

going to change it and say, what's the piece of advice or

the value you really hope to instill in your kids?

Those are those would probably be the same

answers. And I think they are be willing to take risks. And just

take the first step. I will caveat that by saying the

biggest mistakes I've made in my career have all been when I

thought it was going to be easy when I didn't put in the work

and I wasn't going to be committed for the long haul. So

I think there's real value and really digging into what you're

about to do or what you're considering doing what you think

it's going to take. Do you want to do it you know, asking

yourself all those questions up front. But don't get paralyzed

by analysis. Take the first step because you know, whatever plan

you put together, whatever path you think you're going to take,

it's absolutely going to be wrong on day one. So just jump

in. Just start be open to making mistakes, be open to learning

and course correcting right, because progress is the key

there is no perfection.

it's so interesting that so many people

I did miss identify failure and mistakes, right? Like they think

failure is this horrible thing that they shouldn't avoid at all

costs. And from experience interviewing all of these

brilliant people like yourself, who've built multiple successful

enterprises failure is something that almost you have to embrace.

Yeah, a reframe of that is is that a reframe of

that, for me is that it's only really a failure if you don't

learn from it. And so, you know, we choose to look at life as

life is happening for us, not to us. And so when you look at

things through that lens, what could be perceived as a failure

or a setback can also be perceived as the best redirect

you could ever have. And that one that you may not have

chosen, or purposely self imposed, but it was imposed for

a reason. And so if you look for that reason, and you go with the

idea that life is happening for me, you can start to find the

silver linings and the beauty in it.

Life is happening for you. I really like that one

I'm going to take that was me, Chris, this has been fantastic

interview I know you just mentioned and published this

book blackout punch and entrepreneurs journey from chaos

to clarity, which I think will be great for so many of our

listeners, because that's the journey many of them are on. So

thanks for giving us some of your wisdom here today and some

anecdotes for our folks to take home with them.

Yeah, it was fun. Thanks for having me on. I

appreciate it.